Be mindful of bank charges

Thirty-two year old software professional Ashish Choudhary got the shock when he received his bank statement in the early part of this year. This Delhi resident’s banking account was debited many times for the reason unknown to him. Later upon enquiry he came to know that the charges were on account of non-maintenance of minimum average quarterly balance by him. While recently the central bank asked banks to not levy charges on non maintenance of average balances, there are other charges that banks would still levy. Here are bevy of charges which banks levy but miss our eyes. Let’s take a look at some unusual charges:

Issuance of Cheque book

You might take pride in issuing cheques frequently to pay for many errands like rent, electricity etc. But it also means you end up using many cheque books throughout the year. However, there is limit to it. Over this limit could attract fee. This varies across banks. For example, if you are a customer of ICICI bank, the fee is Rs 25 per leaf. So a cheque book of just 5 cheque leaves would cost you Rs 125. The charges might rise in the coming years due to RBI’s encouragement of electronic payments.

Physical bank statements

If you want to have a bank statement issued to you in physical form, be prepared to shell out some amount. Again this varies across banks. ICICI bank for instance charges Rs 50 for statement ordered through IVR, ATM or net banking. Similarly, the charges get double to the tune of Rs 100, if a duplicate statement is asked to be issued.

Credit card payment

Credit card companies give you the facility to make credit card payment via cash but it comes at a cost. You should make sure that you make payment via cheque couple of days before the due date so that the amount gets credited. Else you would end up making payment via cash which means extra fee too. Take for instance HDFC Bank. You have to pay Rs 100 as processing costs for payment of credit card bills in cash.

Cheque return

It is always better to keep sufficient funds in your account. If you issue a cheque to someone and it bounces back due to insufficiency of funds, you would attract penalty. For instance, if you bank with ICICI bank and any cheque issued by you gets returned, your account would get debited with Rs 350. If the mistake is repeated again in the same month a double amount would be deducted. In this case it is Rs 750. Similarly return of electronic clearning system(ECS) also attracts charges upto Rs 200 in some banks like Axis.

Account closure charges

Do not assume that you don’t have to pay anything for closing your account. While there are no closing charges within 30 days of opening the account, you have to fork out Rs 500 if you close the ICICI bank account between 31 days and 1 year. After that there are no charges. On the other hand, Axis bank charges Rs 100 if the account is closed within 6 months of opening. After that there is no penalty.

Stop cheque payment

If you have issued a cheque to someone make sure you do not ask your bank to stop while in process. This is because it is considered as dishonored and attracts a penalty. This is usually Rs 50 per cheque. But this is only levied if asked for manually. A request made through internet banking or customer care is accepted free of cost.

ATM Fee

While you can use ATM of your own bank end number of times for financial reasons like cash withdrawal and other non financial reasons, this is restricted to just 5 attempts at other banks’ ATM. After this you are charged a fee. This is normally Rs 20 for each financial transaction and around Rs 8.50 for non financial transactions like balance enquiry, mini statements etc.

Issuance of passbook

While passbook is issued free of cost by the banks, a duplicate of the same is chargeable. It is normally Rs 100 for a duplicate pass book. Even upgradation of passbook is chargeable at the rate of Rs 25 every time now.

Bank at home services

Some banks provide various home collection services like cash deposit, cash delivery, demand draft and cheque deposit for the convenience of the customers. However, there is a fee attached to it. The ICICI bank, for instance, levies a fee of Rs 50 per transaction. Given the convenience it provides, it’s not a huge amount, though. For lower amount, the charges are also lower. For instance collection of cheques upto Rs 5000 would attract only a fee of Rs 25 in case of City Union Bank.

Insta alerts

Banks provide you insta alert facility via sms these days. Here you are reminded about bill payment that is due or any amount that is debited or credited to you above a certain limit. However, this is not free. For this too, you are charged a certain amount every quarter. This is 15 Rs per quarter for banks like HDFC. In a year this amounts to a total of Rs 60. If you have two or three accounts this would be equivalent to Rs 120 or Rs 180. However, if the insta alert facility is availed through e-mail there are no charges. This facility brings additional security and keep you informed. Therefore, just treat it as an unavoidable expense that you must incur to avoid charges on extra cheques.

NEFT and RTGS Payments

While request for extra cheque leaves are usually charged, electronic payments too are not completely free of cost. While the charges are small, it is still better to be informed about them. For transaction done using facility of National Electronic Fund Transfer (NEFT) the fee is as low as Rs 2.50 upto Rs 10000, but if the transaction goes upto Rs 10 lakh, the fee also goes higher upto Rs 50. However, if transaction is done through Real Time Gross Settlement (RTGS), charges are Rs 25 for transaction between Rs 2 and Rs 5 lakh. But this again goes upto Rs 50 for transaction between Rs 5 and Rs 10 lakh.